Snapshot: FY 2024–25 vs FY 2025–26 Cash Rules

What Actually Changed?

The core cash limits remain the same, but the method of enforcement and monitoring has evolved significantly.

1. Stricter Surveillance, Not New Sections

FY 2025–26 didn’t introduce new thresholds, but the government has put a stronger spotlight on enforcement. Financial institutions, auditors, and reporting entities are under tighter scrutiny to comply with reporting standards and real-time monitoring.

2. AI-Powered Risk Profiling

Data from income tax returns, GSTN, PAN-based tracking, and banking transactions is being centrally linked. This helps identify discrepancies between declared income and actual cash usage. Patterns like cash splitting, routing funds through proxies, or non-filing with highvalue withdrawals now raise red flags.

3. Enhanced TDS Framework

Cash withdrawals over ₹1 crore (or ₹20 lakh for non-filers) are under sharper TDS enforcement. Now, banks are required to deduct TDS promptly and report the same to authorities, leading to faster action.

Why the Shift in FY 2025–26?

The stricter enforcement is part of a broader financial and policy transformation. Here’s why:

1. Continued Use of Cash for Unaccounted Transactions

Despite years of awareness campaigns and compliance drives, cash continued to play a major role in property deals, informal lending, and unaccounted business transactions. The government aims to make such activities economically unviable.

2. Digital Ecosystem Maturity

With UPI adoption skyrocketing and nearly every Indian bank account linked to PAN or Aadhaar, the digital infrastructure is now robust enough to monitor and analyze financial behavior at scale.

3. Global Regulatory Alignment

India’s commitment to transparency through global financial standards such as the FATF and Base Erosion and Profit Shifting (BEPS) framework demands more control over opaque transactions. These measures are a part of aligning with international anti-money laundering protocols.

What It Means for You

If You’re an Individual

• Do not accept or pay over ₹2 lakh in cash for any occasion.
• Keep documented proof for any substantial transaction.
• Avoid attempts to split cash transactions to stay under limits—it can still be flagged as structured.

If You’re a Business Owner

• Avoid cash payments above ₹10,000 to suppliers or service providers.
• Maintain proper books with invoices, bank proofs, and vouchers.
• Ensure timely tax filings to avoid higher TDS on withdrawals and ensure expense claims are not disallowed.

What Stayed the Same

While the numbers may not have changed from FY 2024–25, the level of scrutiny has increased. The ₹2 lakh cash receipt rule, ₹20,000 cap on loans/deposits, and ₹10,000 daily limit for business expenses are still in place, but now being monitored with enhanced digital tracking tools.

How AK Consulting Can Help You Stay Compliant (and Stress-Free)

At AK Consulting, we understand how easy it is to misstep in today’s regulatory climate, especially when older business practices rely heavily on cash. That’s why we offer tailored support to help you adapt and stay ahead.

1. Transaction Review & Structuring

We help you design transactions (loans, advances, vendor payments) to avoid breaches— while staying fully tax-legal.

2. Threshold Monitoring

Get real-time alerts when you’re nearing a limit—daily, monthly, or annually—so you’re never caught off guard.

3. Business Expense Compliance

We ensure your expense records are GST- and income-tax-ready. No disallowed expenses. No compliance gaps.

4. Clean Loan Documentation

Need to accept a personal or business loan? We create clean audit trails with proper agreements and digital evidence.

5. AIS & TIS Monitoring

We track your financial statements on the tax portal so you’re aware of what’s being reported—before the tax department raises questions.

6. Filing Assistance & Notice Support

If your transactions trigger scrutiny or a notice, we represent you—building your defense with strong documentation and expert responses.

Who Can Benefit from Our Support?

• Real estate professionals and landlords
• Retailers or traders with high cash flow
• Freelancers or consultants receiving large payments
• Small business owners who rely on cash vendors
• Anyone receiving loans, advances, or gifts in cash

Final Thoughts

India isn’t banning cash—it’s tracking it. The laws aren’t new, but the systems are smarter and the consequences, faster.

With AK Consulting, you don’t just avoid penalties—you gain clarity, confidence, and complete control over your financial compliance.

Ready to Check Your Cash Compliance?

Whether you’re a salaried professional or a business owner, it’s always better to be proactive.